Madagascar, a country in southern Africa located in the Indian Ocean east of Mozambique, is the fifth largest island in the world, with a land mass of 587,000 km2 and 24.24 million inhabitants in 2016.
The installation of the Senate in February 2016 completes the establishment of all the democratic institutions of the IVth Republic. The 82-year-old president of the Senate, Mr. Honoré Rakotomanana, now holds the second highest office in the country. In accordance with the Constitution, he serves as acting president in the event of the resignation, dismissal, or death of the president of the Republic.
President Hery Rajaonarimampianina and his prime minister have devised a national development plan with their Government, which revolves around three pillars: improving governance, fostering economic recovery, and broadening access to basic social services.
Madagascar received a commitment of $6.4 billion in support of its development projects (2017-2020) during the Conference of Donors and Investors organized by the Malagasy Government in Paris in December 2016 with the support of the African Development Bank, the World Bank Group, and the United Nations Development Programme (UNDP). An envelope of $3.3 billion in investment was also announced by the private sector.
Madagascar is one of the countries that are most vulnerable to climate hazards. This weakens macroeconomic stability and hampers poverty reduction efforts. Measures to prevent and respond to climate shocks should be integrated into economic and fiscal policies. Moreover, strengthening the resilience of the productive sectors, and especially of agriculture, is crucial to ensuring sustainable economic growth, benefiting the poorest, who are the main victims of climate shocks.
The two natural disasters that affected Madagascar in early 2017 resulted in considerable human and material damage, estimated at $400 million (4% of GDP), including the destruction of
To cope with these shocks and support economic growth, the public authorities adjusted their fiscal and monetary policies. A budget of $50 million is allocated in the supplementary budget of June 2017 for post-hurricane reconstruction and to assist regions where drought persists, including to cover emergency expenses in health, education, social protection, agriculture, and public works. These additional expenses are mainly financed by exceptional aid obtained by the country to cope with these climatic shocks. Subsidies to JIRAMA have been increased to ensure the supply of electricity. In addition, the monetary policy was tightened in May 2017 to contain inflation.
The economic outlook remains positive. GDP growth is expected to be 4.3% in 2017 and is projected to exceed 5% in the medium term. It should be supported by the buildings and public works sectors, as well as textiles. The value added in the agriculture sector is expected to decrease by 0.3% compared to 2016.
While Madagascar has great potential, the country has lagged on several development indicators: almost 80% of the population lives on less than $1.90 per day, with one child in two under 5 years suffering from stunting, and Madagascar is the fifth largest country in the world with the highest number of unschooled children. Moreover, the rate of access to electricity is 13%, one of the lowest in the world.
Madagascar is also one of the countries that are most exposed to extreme weather events and experiences, on average, three major natural disasters per year. In addition, repeated political crises, the last of which shook the country from 2009 to 2013, often threaten the development progress made.
Last Updated: Oct 13, 2017